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Streamlining KYC to address banking inefficiencies

Know You Customer (KYC) — the process of a bank identifying and verifying the identity of its clients — is a hot topic right now. Why? Because while it is costing banks millions, not doing it the right way is costing them dearly in their reputation. A recent news article has highlighted the average UK bank is currently spending £5 million a year as a result of inefficient or manual Know Your Customer (KYC) processes. Inefficiencies that have been brought into sharp focus following last week’s deadline for full implementation of the Fourth European Anti-Money Laundering Directive (AMLD4), which is designed to prevent money laundering, terrorist financing, identity theft and financial fraud.

With this new regulatory requirement for enhanced due diligence of high risk customers, banks must identify ultimate beneficiary owners (UBO) and screen stakeholders against watch lists and politically exposed person (PEP) lists. By implementation of the right technology, services and support, banks can streamline these processes and NTT DATA Services can help. We provide our clients with outcome-based solutions for banks; running the end-to-end process on managed services models for on-boarding, KYC and Remediation.

Our banking industry clients view their biggest challenges begin with inconsistent KYC processes across different lines of businesses (LoB), with no single view of client KYC information. As a result, one banking customer can have multiple relationships within that bank without a single LoB view of that customer. For example, corporate loan officers might not know their customers also have current accounts or credit card accounts with their bank.

Manual processes of collecting data — a long list of possibilities, which might include:

reliance on manual risk assessment,

multi-jurisdictional document collection, analysis and archival,

time spent by staff performing ID&V checks and building UBO structures,

specialist training, and

recruitment of compliance analysts; can lead to inefficiencies in operations and higher costs.

NTT DATA Services leverages Robotic Process Automation (RPA) to drive down inefficiencies and lower operating costs, for some of the specific manual intensive tasks in the on-boarding and KYC value chain. Our exciting work on RPA can be explored in more detail in this short video, but we have been successfully and uniquely adopting this technology across the banking sector for some time. We have been reducing operating costs by more than 40% by leveraging our methodology, tools and frameworks, while improving efficiencies for operations and achieving higher Straight Through Processing (STP) rates for the on-boarded customers.

The financial services industry is undergoing massive technology-enabled business transformation and KYC is emerging as a key focus area for banks worldwide. As highlighted in a 2016 Celent report on Artificial Intelligence in KYC-AML, “Heightened regulatory scrutiny and growing cost pressures are severely impacting Know Your Customer (KYC) and Anti-Money Laundering (AML) practices of banks and other financial institutions”.

NTT DATA Services has emerged as a key KYC service provider, with extensive experience of working with banking customers across the globe. Unique aspects of NTT DATA Services’ KYC offering include comprehensive coverage across the entire customer value chain for on-boarding, KYC operations, access to global company house information, screening, hit analysis, security assurance, predictive analytics and back-book remediation. NTT DATA Services’ solution leverages partners and our own IP to reduce time spent on manual on-boarding and due diligence tasks, freeing up time for relationship managers to focus on strengthening customer relationships.